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Onto Innovation Inc. (ONTO) Q1 2024 Earnings: Surpasses Revenue Expectations, Aligns with EPS ...

GuruFocus Research
·3-min read

  • Revenue: Reported at $229 million, surpassing the estimated $222.55 million, driven by expansions in high-performance computing and memory for AI applications.

  • Net Income: GAAP net income reached $47 million, falling below the estimated $51.19 million.

  • Earnings Per Share: Non-GAAP diluted EPS was $1.18, exceeding the estimated $1.08.

  • Gross Margin: Maintained a strong gross margin at 52%, consistent with the previous quarter.

  • Operational Cash Flow: Generated $57 million from operations, representing 25% of the revenue.

  • Future Outlook: Revenue for the upcoming quarter is projected between $230 million and $240 million, with non-GAAP diluted EPS expected to range from $1.14 to $1.26.

  • Product Development: Achieved a quarterly record with $161 million in revenue from specialty and advanced packaging customers, highlighting growth in AI packaging solutions.

Onto Innovation Inc. (NYSE:ONTO) has released its financial results for the first quarter of 2024, showcasing a strong performance with significant revenue growth driven by advancements in AI packaging and semiconductor inspection systems. The details of these results were disclosed in their recent 8-K filing on May 9, 2024.

Company Overview

Onto Innovation Inc. is a pivotal player in the semiconductor industry, specializing in the design, development, and manufacturing of high-performance control metrology, defect inspection, lithography, and data analysis systems. These products are crucial for microelectronics device manufacturers worldwide, with major operations in the United States, Southeast Asia, China, Japan, and Europe, particularly in Taiwan and South Korea.

Financial Performance Highlights

For Q1 2024, Onto Innovation reported a revenue of $229 million, which not only represents a significant increase from the previous year's $199 million but also exceeds the analyst's expectation of $222.55 million. This growth was primarily fueled by customer capacity expansions in high-performance computing (HPC) and high bandwidth memory (HBM), both essential for supporting AI market growth.

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The company achieved a GAAP gross margin and a non-GAAP gross margin of 52%. Its GAAP net income stood at $47 million, with a GAAP diluted earnings per share (EPS) of $0.94. Notably, the non-GAAP net income reached $58 million, translating to a non-GAAP diluted EPS of $1.18, which aligns closely with the estimated EPS of $1.08.

Operational cash flow was robust at $57 million, accounting for 25% of the revenue, indicating strong cash-generating capability.

Operational and Strategic Developments

Onto Innovation's record revenue from specialty and advanced packaging customers, which reached $161 million this quarter, underscores the company's strong market position. The Dragonfly G3 inspection system saw a shipment increase of over 30% from the previous quarter, highlighting growing market demand. Additionally, the introduction of new capabilities for the Dragonfly G3 system, enabling 100% wafer inspection, and the selection of the new Firefly G3 system by a leading panel manufacturer, demonstrate Onto's continuous innovation and adaptation to market needs.

Future Outlook

Looking ahead to Q2 2024, Onto Innovation projects revenue to be in the range of $230 to $240 million, with GAAP diluted EPS expected between $0.88 and $1.00, and non-GAAP diluted EPS between $1.14 and $1.26. These projections reflect the company's positive trajectory and expected continued demand in its key market segments.

Conclusion

Onto Innovation's Q1 2024 results not only demonstrate a solid financial position but also highlight the strategic advancements the company is making in technology and market penetration. As Onto continues to innovate and expand its product offerings, it remains well-positioned to capitalize on the growing demands of the semiconductor industry, particularly in the AI sector.

For more detailed information, you can access the full earnings report and join the upcoming webcast and conference call. Details are available on the Onto Innovation website.

Explore the complete 8-K earnings release (here) from Onto Innovation Inc for further details.

This article first appeared on GuruFocus.